Fontana and Fontana - [2018] FamCA 402

FAMILY COURT OF AUSTRALIA

FONTANA & FONTANA

[2018] FamCA 402

FAMILY LAW – COSTS – Where the wife seeks costs on a party/party basis in respect to property proceedings – Where relevant factors under s 117 of the Family Law Act 1975 (Cth) considered – Where circumstances justify departure from the normal rule – Order made for husband to pay 25 per cent of wife’s costs on a party/party basis.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.18

Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160
Collins and Collins (1985) FLC 91-603
D & D (Costs) (No. 2) (2010) FLC 93-435
Fontana & Fontana [2013] FamCA 548
Fontana & Fontana [2016] FamCAFC 11
Fontana & Fontana [2017] FamCA 374
Fontana & Fontana [2018] FamCAFC 63
Greedy and Greedy (1982) FLC 91-250
Hawkins & Roe [2012] FamCAFC 77
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Luadaka v Luadaka (1998) FLC 92-830
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Penfold v Penfold (1980) 144 CLR 311

APPLICANT:

Ms Fontana

RESPONDENT:

Mr Fontana

FILE NUMBER:

PAC

5188

2008

DATE DELIVERED:

1 June 2018

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

Upon receipt of Submissions on 30 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Hodgson & Mr Chen

SOLICITOR FOR THE APPLICANT:

Self-represented litigant

COUNSEL FOR THE RESPONDENT:

Ms Druitt

SOLICITOR FOR THE RESPONDENT:

Gonzalez & Co

Orders

That the husband pay 25 per cent of the wife’s costs of and incidental to the property proceedings finalised by orders made 19 May 2017 as agreed within one month from this date or otherwise as assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Fontana & Fontana has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 5188 of 2008

Ms Fontana

Applicant

And

Mr Fontana

Respondent

REASONS FOR JUDGMENT

On 19 May 2017 the Court delivered reasons for judgment and made orders as to property adjustment as between the applicant husband and respondent wife.
Orders were made as follows:
(1)That within three months from the date of these orders the wife pay to the husband $323,033.00 in default of payment by the due date interest to accrue.
(2)That in default of payment to the husband as provided the husband shall have liberty to apply as to enforcement.
(3)That the wife indemnify and save harmless the husband from any liability to Mr CC and Mr SR arising from work undertaken at the property at Suburb BB.
(4)Otherwise, all applications be removed from the pending cases list.
(5)That any application for costs be made by way of written submission within one month from this date with any submissions in response to be within a further 14 days.
Subsequent to orders, the husband appealed to the Full Court and the wife cross appealed. Both appeals were dismissed.
Pursuant to orders made 19 May 2017, the wife filed and served written submissions seeking costs as against the husband. The husband filed written submissions in response.
Consequent upon the parties’ appeals to the Full Court, the Application for Costs was adjourned generally with liberty to restore. On 12 April 2018 the Full Court dismissed the appeals before it: Fontana & Fontana [2018] FamCAFC 63.
Judgment as to costs was reserved on 30 April 2018.
The wife seeks an order that the husband pay her costs of the property proceedings on a party/party basis.

Costs

Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They relevantly, in these proceedings, relate to the following:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party has legal aid and the terms of any grant of aid;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the Court considers relevant.
In Collins and Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.
In Greedy and Greedy (1982) FLC 91-250 and Luadaka v Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.
Later the Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
17.With respect to the application of the section, in Penfold and Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(footnotes omitted)
18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) which state:
19.18 Method of calculation of costs
(1)The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162, the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.
In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.
Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748:
130. If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…

The wife’s contentions

The wife contends that by reason of the Court’s criticism of the husband in the first trial (Fontana & Fontana [2013] FamCA 548) that he should have been alert to the deficiencies in his disclosure and evidence in the rehearing following the first Appeal (Fontana & Fontana [2016] FamCAFC 11). Such may be the case, but the present application turns on the issues arising from the subject trial.
The reasons for judgment of the subject trial (Fontana & Fontana [2017] FamCA 374) are replete with issues emanating from the husband’s failure to disclose and inadequate evidence. The wife was put to expense in sourcing by subpoena third party documents so as to seek to clarify the husband’s financial position and dealings with significant sums of money which were all matters in the province of the husband to provide or give evidence about. He did not.
At trial the husband provided little in response to a Notice to Produce clearly relating to documents in his possession and control. The trial was thus protracted to a degree by the husband’s conduct necessitating lengthy cross examination.
The husband’s failure to adduce appropriate evidence was the subject of strong criticism by the Full Court.
Otherwise, the wife contends that the husband’s late application to adduce adversarial expert evidence, a discrete issue that was determined against the husband at the commencement of the trial further unduly prolonged the proceedings.
The husband, it is submitted, has the financial capacity to meet any costs order.

The husband’s contention

The husband summits that he was not wholly unsuccessful in the proceedings.
He refutes the suggestion that his conduct in the proceedings as complained of unduly protracted the proceedings.

Discussion

The relevant considerations are set out above.
The financial circumstances of the parties are dealt with in the primary reasons for judgment. It is not contended that the husband has no capacity to meet an order for costs. Not that any such incapacity is a bar to a costs order (D & D (Costs) (No. 2) (2010) FLC 93-435).
Neither party has legal aid.
The conduct of the husband complained of is referred to above and the Full Court on the Appeal said at [30] – [31]:
Relying upon the Full Court decisions in Black and Kellner (1992) FLC 92-287 and Weir and Weir (1993) FLC 92-338 (“Weir”), the wife responded that, in the context of the husband’s failure to make full and frank financial disclosure, there is nothing unjust about the decision. The Full Court stated in Weir at 79,593:
It seems to us that once it has been established there has been a deliberate non-disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
Counsel for the husband effectively conceded this point in his response to the wife’s cross-appeal, allowing that the primary judge had taken into account the husband’s non-disclosure in both the formulation of the three pools and the assessment of contributions in Pool A ...
Neither party was wholly unsuccessful.
There are no relevant offers of settlement and no other relevant matter contended.
As was said in Hawkins & Roe (supra) while all relevant considerations under s 117(2A) must be taken into account and balanced to determine whether an order for costs is justified in the circumstances, there is nothing to prevent one matter being ultimately determinative.
The circumstances of this matter, particularly the husband’s failure to make full and frank disclosure in the primary proceedings as commented on by the Full Court in the Appeal Judgment, in the opinion of the Court, justify a departure from the general rule.
It is appropriate that he make a contribution to the costs incurred by the wife on the remittal hearing.
There will be an order that the husband pay 25 per cent of the wife’s costs of the proceedings as agreed or as assessed.
Orders will be made accordingly.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 1 June 2018.

Associate:

Date: 1 June 2018